"The economic policy packages could not be implemented because there is no company which can serve as a moderator for the program. Therefore, the establishment of a holding company for state-owned companies (BUMN) in the energy sector is urgently needed. If possible, it should be established before August 17, 2016," Achmad Widjaya, the deputy chairman for upstream committee of the Indonesian Chamber of Commerce and Industry (Kadin), said in Jakarta on Monday.
The government, since September last year, has issued 12 tranches of economic policy packages. Three of these economic policy packages needed to be implemented on priority as these dealt with refinery plants, new and renewable energy, and gas conversion for motor vehicles.
Implementation of these packages is delayed for want of a moderator. If formation of a holding company is put on hold, these packages would not be implemented anytime soon, according to Widjaya.
As a result of the delay in the establishment of the holding company, the gas price, both for industry and household, remains high.
A holding company will make the state-owned oil and gas company Pertamina more efficient as it will eliminate overlapping of tasks between Pertamina Gas (Pertagas/Pertamina subsidiary) and state-owned gas distributor company (PGN).
"Without a holding company, the development of gas pipeline network will see an overlap in work. But with a BUMN holding company, there will be only one authority to implement the policy," Widjaya said.
The presence of a BUMN holding firm for energy will make it easier to put in place energy policies in upstream and downstream areas. As of now, the policy for upstream is different from that for the downstream concerns.
"With a holding firm, the direction of the energy policy will be clear. This is important as upstream investors are now being discouraged because the price of oil is going down in the world market," said Widjaya.
Minister for State Enterprises (BUMN) Rini Soemarno said Pertamina would be made an energy holding company and that PGN would become a subsidiary of the state-owned oil and gas company.
"Pertamina would be the parent company. The shares owned by the government in PGN would be handed over to Pertamina," Rini said last month.
Pertamina, which is wholly owned by the government would be the parent company for all state controlled energy companies, she said.
She said the process of forming the energy holding has been in the final phase and it is expected to be wrapped in September this year.
Implementation is waiting only for a draft government regulation which is expected to be issued in mid July, she added.
She said the plan is part of the program of grouping state companies in a number of holding companies.
According to Finance Minister Bambang Brodjonegoro, the process to establish Pertamina as a holding company for gas distributor PGN will be completed before the post-fasting month of Eid el-Fitr or Lebaran festivities in July this year.
"The feasibility study has been completed and all of the processes are in progress. I have spoken to Finance Minister Bambang Brodjonegoro and the draft government regulation about it will be submitted to President Joko Widodo," Minister Rini Soemarno said.
Pertamina was chosen as the holding company because the oil and gas firm is 100 percent owned by the government.
Besides Pertamina, several other state-owned enterprises would be brought under a single holding firm. These will include companies involved in toll road construction, mining and finance. "It will be finished soon," noted Rini.
On the same occasion, President Director of Pertamina Dwi Soetjipto said his company was ready to assume responsibility if it is made a holding company for the state-owned PT PGN.
Therefore, the National Development Planning Agency (Bappenas) has expressed optimism that the establishment of a holding company for state-owned enterprises will take place soon.
The Minister of the National Development Planning/Head of Bappenas, Sofyan Djalil said in the past that the plan to create an SOE holding company was much hampered by the political process at home.
"Now, the support from the president is very strong. So the plan to form a holding company will not remain a plan only but will be realized soon," remarked Sofyan after opening a seminar in Jakarta on Thursday.
President Joko Widodo (Jokowi) has earlier encouraged SOEs, which run similar types of business to set up a holding company in order to increase efficiency.
The government has prepared a series of plans for the establishment of SOE holding firms, which will be set up until the year 2019. These SOEs consist of state companies doing business in the fields of tourism, logistics, plantations, fertilizers, pharmacies, ports, insurance, banks and services.
Now the government is targeting the formation of six holdings in the infrastructure sector, mining, energy resilience, banking, toll roads and renewable energy.(*)
Reporter: Andi Abdussalam
Editor: Heru Purwanto
Copyright © ANTARA 2016
